Beijing prevents companies "holding rights to crucial technologies, such as 5G" from taking legal action outside China, "when their patents are used illegally or without adequate compensation, for example by Chinese smartphone manufacturers “, says the European Commission in a press release.

Since August 2020, Chinese courts can prohibit patent holders from going to a non-Chinese court to enforce their rights through an "injunction against suit" in a third country.

Since that date, four injunctions of this type have been issued in China against foreign patent holders, observes the Commission, stressing that the violation of such an injunction can be punished with a daily fine of 130,000 euros.

This policy of the world's second largest economy is "extremely detrimental to innovation and growth in Europe", as it prevents EU technology companies from taking advantage of the competitive advantage granted to them by their patents and "pushes them to accept license fees below market prices", deplores the European executive.

According to Brussels, "Chinese manufacturers are asking for these anti-lawsuit injunctions in order to benefit from cheaper, or even free, access to European technology", which puts Western groups in an "extremely unfavorable" position.

"Companies have the right to seek justice on fair terms when their technology is used illegally," said Commission Vice-President Valdis Dombrovskis.

This new procedure comes at a time when the EU is already engaged in a standoff at the WTO with Beijing, accused of blocking Lithuanian imports amid diplomatic tensions over Taiwan.

After 20 years of membership in the WTO, the United States and Europeans regularly accuse China of circumventing the rules of the institution to protect its companies, by strictly controlling access to its market for foreign groups and by amplifying the domination by the state of whole sections of its economy.

Critics deemed "unfounded" by Beijing.

The "consultations" requested by the EU are the first step in the dispute settlement procedure within the framework of the WTO.

If these consultations fail within 60 days, the EU may request the establishment of a group to decide on the matter.

© 2022 AFP